Eye on Lithium: The global battery minerals arms race sees a lithium bottleneck

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• Lithium refinement could cause a bottleneck for net-zero goals
• China dominates cheap production
• 3,000tpa plant to be built at Lithium Energy’s Solaroz

All your lithium news, Tuesday, June 19.

With an eye-opening analysis of our global struggle to meet lithium and other critical minerals demands, new Benchmark Intelligence analysis says the battery industry requires at least US$514 billion across the entire supply chain to meet expected demand in 2030.

Not only that, they reckon we’ll need an extra US$406bn in the following 5 years to 2035.

Demand for lithium-ion batteries is forecast to grow exponentially to 3.7 terawatt hours (TWh) in 7 years’ time, and Elon Musk has touted that we’d need 300TWh by 2050.

Benchmark says that producing the critical raw materials will require US$220 billion (43% of the total), with nickel and lithium accounting for over half of that.

Manufacturing the additional 2.7 TWh of batteries needed by 2030 will require US$201 billion and the midstream production of battery materials will take the remaining US$93 billion.

“The energy transition is still in its early stages and massive capital deployment is going to be needed in order to meet the goals of industry and policy makers,” Benchmark COO Andrew Miller said.

“Energy storage might form a relatively small piece of the overall financing required, but it is a strategically critical piece of the puzzle. Batteries are the platform technology for clean energy goals, so financing these supply chains is at the heart of the race towards net zero.”

Capex differentials

That US$514 billion bill for the industry will likely grow as countries increasingly look to develop regional supply chains.

“Take US lithium producer Albemarle, for example: their lithium refinery in Meishan, China, is projected to cost around US$500 million for 50,000 tonnes LCE,” Benchmark said.

“Their equivalently sized facility in South Carolina, USA is projected to cost US$1.3 billion.”

It remains to be seen if capable operators in countries with more expensive labour are able to keep down capex while meeting demand over the next decade or so.

Bolivia’s new marching powder

Meanwhile, another big Chinese battery manufacturer, CATL, is investing US$1.4 billion into Bolivia to build two lithium plants that will produce a combined 200,000tpa of lithium hydroxide.

Bolivia is known to have large quantities of untapped lithium resources – just how much is relatively unknown though the United States Geological Service threw out a fairly gigantic estimate in January of about 21Mt of brine-based lithium – more than any other country in the world.

Just how much speculative interest there is from other nations is another question. The team here at Stockhead will keep an eye out to see if any ASX players have the legs for it.

Here’s how Aussie lithium stocks are tracking:

Just 39 lithium stocks raised their share price today as 59 stayed flat. 51 dropped into the red.

WHO’S GOT NEWS OUT?

LEO LITHIUM (ASX:LLL)

ASX market darling Leo has upgraded the MRE of its Goulamina lithium project in West Africa by an impressive 48.2%, as it trundles along towards becoming one of the largest spodumene mining operations in the world.

Goulamina now has a resource of 211Mt at 1.37% Li2O, and the explorer reckons that makes it the world’s 5th-largest spodumene deposit.

Leo MD Simon Hay said the significant resource upgrade confirms the outstanding scale, high-grade nature, and further growth potential of Goulamina.

“This significant upgrade also supports the possible extension of the 23-year mine life of the Goulamina project and the recent agreement with Ganfeng.”

A key T&C of that handshake with Ganfeng – who now owns 9.9% of the company – is for the explorer to conduct an engineering study into raising Stage 2 capacity to 500,000tpa, which would propel Goulamina to 1mtpa operation.

Currently, it’s forecasting an initial 506,000tpa of spodumene concentrate in the first half of next year, increasing up to 831,000tpa as part of Stage 2, so this would be another significant increase.

Leo said results from the MRE upgrade will flow into the planned ore reserve estimate upgrade, scheduled for completion in August.

AZURE MINERALS (ASX:AZS)

AZS has run into more high-grade lithium at its Andover project in WA’s Pilbara after intersecting mineralisation containing up to 1.7% Li2O.

The explorer says these latest drill holes confirm lithium mineralisation extends from the pegmatite outcrops down-dip for more than 350m.

Particularly, the lithium-rich AP0011 pegmatite has been confirmed over 400m in length with drilling extending mineralisation further to the west with large step-outs.

Best mineralised intersections include 112.4m at 1.05% Li20 from 263.3m, including 30.3m at 1.18% Li20 from 263.3m and 13.5m at 1.55% Li20 from 280.01m, as well as 59m at 1.24% Li20 from 316.7m, which also includes 10.1m at 1.70% Li20 from 330.4m.

AZS MD Tony Rovira said the latest assay results correlate closely with the presence of spodumene, supporting the company’s exploration model and allowing it to accurately plan and execute drilling in advance of receiving assays.

“Given the substantial widths and strike lengths of individual pegmatites, and the overall scale of the Andover pegmatite swarm with hundreds of outcropping pegmatites, we’re confident that our project has the potential to host lithium resources of world-class scale,” Rovira said.

To date, 25 diamond core holes have been completed for 9,063m and 15 RC holes for 2,686m.

Diamond drilling (two rigs) and RC drilling (two rigs) are currently focused on testing the AP0009, AP0010 and AP0011 pegmatites to the west of the project, and the company expects to have a total of five to six operating on site moving forward with exploration.

LITHIUM ENERGY (ASX:LEL)

LEL has engaged with Chinese-based Xi’an Lanshen New Material Technology Co to construct a demonstration plant capable of producing up to 3,000tpa of battery-grade lithium carbonate at its Solaroz brine project in Argentina.

Lanshen will build the plant at LEL’s standalone Mario Angel concession (comprising ~543ha out of a total Solaroz concession area of ~12,000ha), located to the southwest of the main block.

Once the plant is completed, if it passes pre-agreed acceptance criteria then Lithium Energy will buy it for either cash consideration, or a percentage interest in the lithium rights associated with the Mario Angel concession.

With commissioning targeted for the second half of CY24 subject to receipt of all necessary permits and approvals, the plant will include Lanshen’s proprietary sorbent-based direct lithium extraction (DLE) technology, which has already been proven on industrial and commercial scales.

So far, drilling at Mario Angel has encountered intersections of up ~235m of lithium brine mineralisation across the upper and lower aquifers, with an average grade of 446mg/l Li in the upper aquifer and 501 mg/l Li in the lower aquifer.

LEL executive chair William Johnson says this partnership with one of the world’s leading providers of DLE technology is a “tremendously” exciting initiative.

“Whilst the location and size of the Solaroz Project as a whole is considered highly favourable for traditional pond evaporation (as used by our neighbours Allkem and Lithium Americas), sorbent-based DLE technology offers a number of potential significant commercial and environmental benefits,” Johnson said.

At Stockhead, we tell it like it is. While Lithium Energy and Azure Minerals are Stockhead advertisers, they did not sponsor this article.

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